August 2016

Baoshan Iron & Steel Co., Ltd.1H16 Result Briefing

The following presentation distributed herewith includes forward-looking statements. All statements,

other than statements of historical facts, that address activities, events or developments that Baoshan Iron

& Steel Co.,Ltd.(Baosteel) expects or anticipates will or may occur in the future are forward-looking

statements.

Baosteel’s actual results or developments may differ materially from those indicated by these forward-

looking statements as a result of various factors and uncertainties, including but not limited to price

fluctuations, actual demand, exchange rate fluctuations, competition and other risks and factors beyond

our control.

Disclaimer

1 1H Results

2 Industry Dynamics

Content

Unit 1H15 1H16 YoY

Sales Volume Million tons 10.70 11.85 ↑10.8%

Operating Income billion RMB 80.9 78.1 ↓3.5%

Gross Margin % 11.5 14.0 ↑2.6ppts

Total Profit billion RMB 4.40 5.02 ↑14.2%

CFO per share note RMB/share 0.49 0.69 ↑41.0%

EPS RMB/share 0.19 0.21 ↑9.3%

BVPS RMB/share 6.85 7.02 ↑2.5%

Cash Conversion Cycle days 31.9 14.8 ↓53.6%

Sales of Only one & NO.1 products 12%

Output of ultra-high strength auto sheet 60%

Note: The CFO does not contain that of the financial company.

Large and medium sized enterprises

40%BaosteelOthers

0

10

20

30

40

50

Bao

steel G

rou

p

Shagan

g Gro

up

Citic Steel

Jingxi G

rou

p

Xin

wu

an Stee

l

Fangd

a Steel

Zon

ghen

g Steel

HB

IS

Shih

eng Stee

l

WISC

O

Ba

os

tee

l

NO.1 among domestic steel players

Operation Overview

5

4

3

2

1

0

billion RMB

12.59 billion RMB

-100

0

100

200

300

400

Baosteel POSCO Nucor Hyundai MSSMC JFE

-10

0

10

20

30

40

50

Baosteel POSCO Nucor Hyundai NSSMC JFE

Most profitable among comparable global steel players

Profit before tax per ton

Profit before tax

Note: Translated at average exchange rate of 1H16.

RMB/ton

Billion RMB

5

4

3

2

1

0

-1

Contributing 43% for the reduction of operating cost per ton

2015

1H16

43%57%

Cost cut initiatives

Baoshan base

Production ramping up smoothly

Products development and certification go as planned

All manufacturing process under stable operation

Zhanjiang Project

1550 pickling line

hot load test

March 15

March 30

2030 hot dip galvanizing line

hot load test

3# converter system

hot load test

May 5

Heavy plate unit

hot load test

May 28

2# blast furnace of Zhanjiang

project ignition

July 15

Cost control of some units better than benchmarks

Technology Innovation

4# BNA hot dip galvanizing line fully achieved intended targets

Batch production of 1180Mpa Dual Phase steel for auto parts

Debut of new products

B27R080、B30R090High Efficiency Grain-oriented Electrical Steel

CT110For High Grade Coiled Tubing

High-end products

Intelligent Manufacturing

“Baosteel and Siemens Intelligent Manufacturing (Industry 4.0) Strategic Agreement”

Groundbreaking cooperation on 1580 hot rolling pilot project

Will jointly establish China Steel Industry 4.0 Standards

E-commerce in Progress

Operating income 8.68 billion RMB 14%

1000+ nationwide warehouses

5.2 billion RMB loans grantedmore than 1 billion RMB balance of loans

Ouyeel international officially launched

Sales volume 3.59 million tons 16%

OuyeelInternet + Steel

On-line Trading

Logistics

Finance

International on-line trading

Environment-friendly

Starting a new round of urban steel mill development plan (2016-2021)

To be the best practitioner of environmental friendliness

521 million RMB

expenditure on environmental projects

143,500 square meters of new green area

24,7000 tons of CO2 emission reduction per year

through Photovoltaic power units

Vision

Action

and better urban steel mill for better life

million tons 1H2016 YoY HoH

Crude Steel Output 13.27 ↑ 20.7% ↑ 13.9%

10.99 11.65

13.27

0

2

4

6

8

10

12

14

1H2015 2H2015 1H2016

10.70 11.45 11.85

1.15 1.48 1.67

0

2

4

6

8

10

12

14

1H2015 2H2015 1H2016

million tons 1H2016 YoY HoH

Sales of Finished Products 11.85 ↑ 10.7% ↑ 3.5%

including：export 1.67 ↑45.2% ↑12.9%

Output & Sales

billion RMB 1H16 YoY HoH

Operating Income 780 ↓3.44% ↓6.05%

Operating Cost 671 ↓6.23% ↓13.72%

80.8 83.0 78.0

71.5 77.7

67.1

0

20

40

60

80

100

1H2015 2H2015 1H2016

Operating imcome Operating cost

Operating Income and Cost

17.7%17.0%

0.35%

3.7%

24.4%

19.7%

0.3%

13.4%

-5%

0%

5%

10%

15%

20%

25%

CRC HRC Tube Others

1H2015 1H2016

CRC 42%

HRC 40%

Tube 6%

Others 12%

Gross Margins & Sales Breakdown

Sales BreakdownGross Margins

billion RMB 1H16 YoY Gross Margins

YoY

Steel Making 48.5 ↓ 5.8% 17.7% ↑5.4ppts

Distribution 66.9 ↓ 8.1% 3.6% ↑0.4ppts

51.4

72.8

48.5

66.9

0

20

40

60

80

Steel Making Distribution

1H2015 1H2016

billion RMB 1H16 YoY Gross Margins

YoY

E-commerce 11.98 ↑55.5% 0.2% ↑0.2 ppts

IT 1.72 ↑6.7% 28.6% ↑2.2 ppts

Chemicals 3.57 ↓8.4% 6.5% ↑0.3 ppts

Finance 0.25 ↓23.2% 50.2% ↓3.0 ppts

7.71

1.61

3.90

0.32

11.98

1.72

3.57

0.25 0

2

4

6

8

10

12

E-commerce IT Chemicals Finance

1H2015 1H2016

Segment Report

1 1H Results

2 Industry Dynamics

Content

9.5%

7.7% 7.7%7.4%

6.9%6.7%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2011 2012 2013 2014 2015 2016

GDP

5.4%

2.6% 2.6%

2.0%

1.4%

2.1%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2011 2012 2013 2014 2015 2016

GDP CPI

• GDP was down to 6.7% in 1H. • CPI growth was up to 2.1% in 1H.

• Prudent monetary policy is expected to continue.

1H2016 1H2016

Economy outlook

Date source：Wind

Crude steel output and Apparent consumption

Unit: million tons 1H16 YoY

Crude steel output 399 ↓ 1.1%

Net export 49 ↑ 10.7%

Apparent consumption 346 ↓ 2.7%

• Crude steel output was 399mn tons in 1H，down

1.1% YoY. Net export increased 10.7% YoY. And

apparent consumption continued to decline.

• Industry FAI increased slightly in 1H, but growth

rate declined for several months.

816 823 804

399

765 739 698

346

0

200

400

600

800

2013 2014 2015 2016

Crude steel output Apparent consumption

411.8

505.5 506478.9

425.7

194.6

14.60%

-2.04% -2.06%

-5.90%

-11%

1.90%

-15%

-10%

-5%

0%

5%

10%

15%

20%

0

100

200

300

400

500

600

2011 2012 2013 2014 2015 20161H20161H2016

Steel industry outlook

Date source：National Bureau of Statistics, Steelhome, Wind

Unit: million tons

Unit: billion RMB

Steel industry FAI

Social inventory Steel mill inventory

• Inventory maintained a relatively low level.

9.27

5.274.00

12.06

0

500

1000

1500

2000

2500

2014年1月 2014年7月 2015年1月 2015年7月 2016年1月 2016年7月

库存总量 长材 板材

0

500

1000

1500

2000

2500

2014年1月 2014年7月 2015年1月 2015年7月 2016年1月 2016年7月

Steel inventory

Date source：Wind

Unit: million tons Unit: million tons

2014 2015 2016 2014 2015 2016

CSPI Prices

• After strong rally and sharp correction in 1H, steel prices continued rising.

74.33

2470

3320

2850

50

60

70

80

90

100

110

2014年1月 2014年7月 2015年1月 2015年7月 2016年1月 2016年7月

1500

2000

2500

3000

3500

4000

4500

2014年1月 2014年7月 2015年1月 2015年7月 2016年1月 2016年7月

价格:热轧板卷:3.0mm:上海 价格:冷轧板卷:1.0mm:上海

价格:螺纹钢:HRB400 20mm:上海

Steel market

Date source：Wind

2014 2015 2016 2014 2015 2016

Unit: RMB/ton

FAI

20.6%19.6%

15.7%

• Total FAI was 25.8 trillion RMB in 1H, up 9% YoY. Growth rate was down slightly.

36.543.6

50.255.2

25.8

20.6%19.6%

15.7%

10.0%9.0%

8%

10%

12%

14%

16%

18%

20%

22%

0

20

40

60

2012 2013 2014 2015 2016

Infrastructure FAI

7.79.4

11.2

13.1

6.4

13.7%

21.2%20.3%

17.3%

20.3%

10%

12%

14%

16%

18%

20%

22%

24%

0.0

5.0

10.0

15.0

2012 2013 2014 2015 2016

• Infrastructure FAI was 6.4 trillion RMB in 1H, up 20.3% YoY.

1H2016 1H2016

Infrastructure

Date source：Wind

Unit: trillion RMB Unit: trillion RMB

Real estate FAI

20.6%19.6%

15.7%

• Real estate FAI was 6.15 trillion RMB in 1H, up 7.2% YoY. Real estate picked up in 1H remarkably.

New start and Sales growth

7.2

8.6

9.5 9.6

6.15

16.2%

19.8%

10.5%

1.0%

7.2%

0%

5%

10%

15%

20%

0

5

10

2012 2013 2014 2015 2016

• New construction was up 14.9% YoY. Sales was up 42.1%. Real estate market experienced an impressive growth.

-7.3%

13.5%

-10.7%-14.0%

14.90%

1.8%

17.3%

-7.6%

6.5%

42.1%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

2012 2013 2014 2015 2016

New Start Sales Growth

1H2016 1H2016

Real estate

Date source：Wind

Unit: trillion RMB

Output Sales

19.27

22.12 23.72 24.50

12.89

4.6%

14.8%

7.3%

3.3%

6.5%

0%

5%

10%

15%

20%

-

5.00

10.00

15.00

20.00

25.00

2012 2013 2014 2015 2016

19.31 21.98

23.49 24.60

12.83

4.3%

14.0%

6.9%

4.7%8.1%

0%

5%

10%

15%

20%

-

5.00

10.00

15.00

20.00

25.00

2012 2013 2014 2015 20161H2016 1H2016

Auto

Date source：CAAM

Unit: million units Unit: million units

• Output and sales were up 6.5% and 8.1% YoY respectively in 1H.

• Passenger car sales was up 9.2% YoY, outperforming commercial car(up 1.9% YoY).

• The demand is expected to be strong in 2H.

Washing Machine Refrigerator

67.42 72.02 71.14 72.75

36.81

1.4%

8.2%

-3.3%

0.7%

6.5%

-5%

0%

5%

10%

0

10

20

30

40

50

60

70

2012 2013 2014 2015 2016

84.2793.41

87.96 89.93

46.99

-3.1%

10.6%

-1.0%-1.9%

-3.9%

-5%

0%

5%

10%

0102030405060708090

100

2012 2013 2014 2015 2016

Air-conditioner

• Washing machine output grew fast in 1H, while refrigerator and air-conditioner output decreased.

• The demand is expected to revive in 2H.

132.81 143.33

144.63 156.50

84.03 4.9%

11.6%11.5%

0.0%

-4.9%-5%

0%

5%

10%

15%

0

20

40

60

80

100

120

140

160

2012 2013 2014 2015 20161H2016 1H2016 1H2016

Home appliances

Date source：Wind

Unit: million units Unit: million units Unit: million units

Machinery value added growth

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

20

13年

3月

20

13年

6月

20

13年

9月

20

13年

12月

20

14年

5月

20

14年

8月

20

14年

11月

20

15年

4月

20

15年

7月

20

15年

10月

20

16年

3月

20

16年

6月

General Equipment Special Equipment

Electrical Equipment Transportation Equipment

2013 2014 2015 2016

60.21

45.34 39.05 41.84

17.15 20.41

69.84

59.95

31.26

16.20

106.95

131.00

148.90

123.04 119.26

0

50

100

150

0

20

40

60

80

2012 2013 2014 2015 2016

Completion New Orders Carrying Orders(right)

Ship building

• The downturn continued in the shipbuilding industry, while the machinery industry growth increased slightly.

• The shipbuilding industry is expected to remain sluggish.

1H2016

Ship building & machinery

Date source：Wind

Unit: million units

Platts（62% Fe） Port inventory

• Iron ore price rebounded sharply in 2016, and iron ore port inventories rose to over 100 million tons.

61.65

10641

0

20

40

60

80

100

120

140

160

2014年1月 2014年7月 2015年1月 2015年7月 2016年1月 2016年7月6000

7000

8000

9000

10000

11000

12000

2014年1月 2014年7月 2015年1月 2015年7月 2016年1月 2016年7月

Raw Material

Date source：Wind

Unit: USD/ ton Unit: million tons

2014 2015 2016 2014 2015 2016

Coking coal（from Australia） First-grade metallurgical coke

• Coking coal and coal prices continue recovering to the level at the beginning of 2015。

865 1210

500

600

700

800

900

1000

1100

2014年1月 2014年7月 2015年1月 2015年7月 2016年1月 2016年7月500

700

900

1100

1300

1500

1700

2014年1月 2014年7月 2015年1月 2015年7月 2016年1月 2016年7月

Raw Material

Date source：Wind

Unit: RMB/ton

2014 2015 2016

Unit: RMB/ton

2014 2015 2016

With good demand, supply control and low inventory levels, the steel price is expected to rise steadily in 2H.

De-capacity of steel industry and mining industry is expected to be reinforced.

The steel demand of infrastructure, real estate, automobile and house appliance is expected to maintain a good momentum.

Outlook for 2H2016